The US on Tuesday said it would release more oil from the country's emergency stockpile in an effort to contain rising fuel prices due to energy supply disruptions from the Iran war.
The Energy Department said it was offering to loan energy companies up to 40 million barrels of crude oil from the Strategic Petroleum Reserve. The offer represents the last of the drawdown of 172 million barrels from the reserve ordered in March. Bids are due by October 6, the department said.
“With today’s actions, the United States continues to lead the co-ordinated efforts to stabilise oil markets for the benefit of Americans and people around the world,” Energy Secretary Chris Wright said in a statement.
The SPR is projected to fall to its lowest levels since 1982 once the drawdown is completed. Most recent government data recorded the reserve inventories at 284.5 million barrels for the week ending September 19. The generally accepted minimum level for safe operations is 250 million barrels.
The US agreed to withdraw 172 million barrels of crude from its stockpile alongside other members of the International Energy Agency in March, to contain rising energy prices due to the closure of the Strait of Hormuz and strikes on key energy sites across the Gulf. The 32-member IEA agreed to a co-ordinated release of 400 million barrels from their reserves.
However, the US claimed on Tuesday that “several European member countries have released only a fraction of the crude oil and petroleum products they pledged”.
“We urge every member country to fulfil its commitments,” Mr Wright said.
Meanwhile, IEA chief Fatih Birol joined an EU energy meeting in Brussels, where he said member states could discuss the potential to release more reserves on to the market. European Energy Commissioner Dan Jorgensen also said he had discussed a possible release of stocks with Mr Birol, adding more talks were needed.
Petrol costs have surged since the US and Israel launched co-ordinated strikes against Iran on February 28. This has amplified political pressure on President Donald Trump and the Republicans before November's midterm elections.
The price of petrol continues to average more than $4 per gallon, versus $3 per gallon the same time last year. while diesel prices recently breached $6 per gallon, compared to $2.5 per gallon one year ago, according to automotive group AAA.
Mr Trump on Sunday said the White House was “very seriously” considering a diesel export ban to mitigate rising oil prices. The idea has been met with pushback from the US energy industry, which argues it could cause further harm to energy markets and consumers.
